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Salvage value is an estimate based on some logic. For example, if you want to know what a fork lift will be worth after 10 years, find out what 10 year old forklifts are selling for today. If you think the forklift will be scrapped after 10 years, figure out how much it weighs and estimate the value of scrap metal in 10 years. If the equipment can be leased, find out what the residual value would be on a 10 year lease. These residual values are a percentage of original cost calculated by finance companies based on historical experience - so use their calculation and expertise.
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When equipment is sold for cash the amount received is reflected as a cash?
That really depends on several things. What accounting method are you using? Has the equipment been depreciated down to salavage value? Has the equipment actually been paid for yet? Yes, initially, you would debit your cash account for the amount received for the equipment, but you wouldn't stop there. A lot of other accounts would be affected as well. If this equipment has already been depreciated down to salvage value, and you receive more than salvage value in cash for it, then you have a capital gain. If you sold it for less than salvage value, you have a loss. What is the current value on the books for this equipment? If you sold it for more of less than that value, you have a gain or a loss. Do you even have this equipment listed as assets?
How can you calculate a motorcycle's depreciation value?
Formula for calculating depreciation value Annual depreciation value = (Total cost - salvage value (if any) ) / useful life
How to compute after tax salvage value?
Salvage Value - [Tax * (Market Value - Book Value)
How do you calculate salvage value?
SALVAGE VALUE The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting to determine depreciation amounts and in the tax system to determine deductions. The value can be a best guess of the end value or can be determined by a regulatory body such as the IRS. The salvage value is used in conjunction with the purchase price and accounting method to determine the amount by which an asset depreciates each period. For example, with a straight-line basis, an asset that cost $5,000 and has a salvage value of $1,000 and a useful life of five years would be depreciated at $800 ($5,000-$1,000/5 years) each year.
Can an asset be depreciated to the point where its value becomes negative?
That can never happen. An asset will either be depreciated to its salvage value, or to zero, depending on whether or not it has a salvage value.
How do you determine the salvage value of farm equipment?
To determine the salvage value of farm equipment for financial purposes, such as taxes, you may need to have it appraised. An appraiser needs to look at the equipment and determine what it is worth for resale as salvage.
When equipment is sold for cash the amount received is reflected as a cash?
That really depends on several things. What accounting method are you using? Has the equipment been depreciated down to salavage value? Has the equipment actually been paid for yet? Yes, initially, you would debit your cash account for the amount received for the equipment, but you wouldn't stop there. A lot of other accounts would be affected as well. If this equipment has already been depreciated down to salvage value, and you receive more than salvage value in cash for it, then you have a capital gain. If you sold it for less than salvage value, you have a loss. What is the current value on the books for this equipment? If you sold it for more of less than that value, you have a gain or a loss. Do you even have this equipment listed as assets?
How can you calculate a motorcycle's depreciation value?
Formula for calculating depreciation value Annual depreciation value = (Total cost - salvage value (if any) ) / useful life
What is the formula to calculate the after tax salvage value?
S-t(s-b)-(1-t)rex+w
Difference between scrap value and salvage value?
Salvage value is defined as the value of the product after its useful life .In other words it is the value after depreciation. Salvage value also known as scrap value.
Is It Better To Buy Or Lease The Plant And Equipment?
At the positive note equipment leasing doesn’t tie up your money. The drawback of leasing – there is no resale or salvage value because you don’t possess the equipment or plant.
How to compute after tax salvage value?
Salvage Value - [Tax * (Market Value - Book Value)
How do you calculate straigt line depreciation?
Straigt line depreciation = (total cost of asset - salvage value)/ useful life of asset.
How do you calculate payback period using bail-out method?
Initial Net Investment / (Annual expected cash flow + salvage value)
What is the value of a salvage vehicle?
The value of a salvage vehicle is roughly 60% of the value of a comparable car with a clean title.
Is the salvage value of a vehicle the same as its book value?
NO, salvage value is subjective. The salvage price is usally set by bids. Depends. If it's salvage the price is very subjective. If it's salvage but reconstructed (i.e. roadworthy) it's typically worth 60% of the value of a comparable car with a clean title. Use kbb.com and edmunds.com to determine appx value.
What has the author G L Liffick written?
G. L. Liffick has written: 'Hydraulic tools and equipment for underwater salvage' -- subject(s): Equipment and supplies, Salvage
